Published in Print: October 9, 2013, as Schools Feel Limited Impact From Shutdown—For Now

Shutdown's Impact on Schools Limited for Now

Schools and districts weathered the first days of the federal government’s shutdown without major disruption, although some educators are anxious about the long-term implications of Washington’s budget stalemate.

—Olivier Douliery/Abaca/MCT

Long-range concern hinges on debt issue

The start of the first shutdown of the federal government in nearly two decades caused some anxiety for state and district education officials, but didn't interrupt business as usual for schools across the country, at least at first.

To be sure, there have been headaches, particularly for the federal Head Start pre-K program, with a handful of centers in several states closing entirely because of Congress' failure to come up with a budget deal before the 2013 federal fiscal year expired on Sept. 30. And the closure has slowed the pace of federal research, put a monkey wrench in state and federal collaboration on key K-12 issues—and turned the U.S. Department of Education's headquarters in Washington into a virtual ghost town, with more than 90 percent of the staff furloughed as of Oct. 1.

The fiscal impasse between congressional Republicans and the White House remained unresolved as of press time. Meanwhile, the federal government is slated to hit its borrowing limit in mid-October, and it's unclear whether a Congress that couldn't figure out a way to keep the government's doors open will be able to keep the nation from defaulting on its financial obligations.

"While this temporary shutdown doesn't have as big of an impact as people in Washington, D.C., might think, the overall dysfunction of government has already taken its toll on our schools," John White, Louisiana's state schools chief, said in an interview. He was referring to the across-the-board budget cuts known as sequestration, which he argued have been particularly difficult for some populations of students, such as disadvantaged children.

Impact Tempered

Much of the K-12 funding for this school year had already been allocated before the government closed its doors to most employees Oct. 1, the start of the 2014 federal fiscal year. And before government workers went home, provisions were made to keep the dollars flowing.

U.S. Sen. Debbie Stabenow, D-Mich., leads a tour group of students from St.
Patrick School of White Lake, Mich., in the Rotunda on Capitol Hill in Washington last week. Congressional staffers and interns usually lead constituent tours, but
because of the federal government shutdown, members of Congress have begun to lead tour groups from their home states.

—Evan Vucci/AP

The Education Department, for example, ensured that $22 billion in funding for key formula programs, including Title I, special education, and career and technical education, would go out the door, as scheduled, in October. If the shutdown continues, additional employees may be brought back to help distribute funding for three competitive-grant programs—Race to the Top, Investing in Innovation, and Promise Neighborhoods—that must be allocated by Dec. 31.

Some other major federal programs with an impact on education also were unlikely to remain affected by a short-term shutdown because of the structure of the programs. For example, most child-nutrition programs, including the school breakfast and lunch programs, which are run by the U.S. Department of Agriculture, will continue uninterrupted through this month.

E-rate dollars—which help schools cover the cost of telecommunications services—will also continue to flow during the shutdown. The Universal Service Administrative Co., which administers the program, is essentially separate from the federal government. But if USAC needs guidance from the Federal Communications Commission, which oversees the E-rate, it will have to wait until after the shutdown.

Taking the Hit

And the closure hasn't been without consequences. More than 90 percent of the Education Department's employees—about 4,000 people in all—were furloughed as of the first few days of the shutdown. If a shutdown were to go on for more than a week, more employees could return on a temporary basis, but not more than 6 percent of the department's staff.

The furloughs left some state education agencies in a bind on their dealings with Washington. "I told everybody, 'Don't bother to call [the federal] Education Department. Nobody is there to answer the phone,' " said Terry Holliday, the commissioner of education in Kentucky.

Kentucky officials had been scheduled to have a call about the state's No Child Left Behind Act waiver monitoring, but that was delayed because of the shutdown. Without such contact, "we won't know what we need to know to tweak [the state's plan] as we gear up for waiver renewal," Mr. Holliday said.

Meanwhile, the shutdown had huge implications for Head Start centers, 23 of which were expecting a fresh round of funding from the U.S. Department of Health and Human Services this month. Together, those centers serve nearly 19,000 children.

At least four centers—in Alabama, Connecticut, Florida, and Mississippi—had to close immediately, according to the National Head Start Association. Three more were expected to shutter if the shutdown continued beyond Oct. 4, Sally Aman, a spokeswoman for the association, said.

Some grantees may be able to dip into their reserves to cover the lapse in aid, said Kenneth Wolfe, a Health and Human Services spokesman.

Making matters worse for Head Start: The shutdown came on top of a 5 percent hit to the program through sequestration, which already has meant loss of access for 57,000 children.

Clare Higgins, the executive director of a Head Start program at Community Action of Franklin, Hampshire, and North Quabbin Regions, in Massachusetts, said her program already had to delay the start of its school year by 10 days because of sequestration. The center would have had to close its doors altogether if the state hadn't stepped in with an advance on a state grant.

But that bridge funding "will basically get us through two weeks," Ms. Higgins said. "It buys time for Congress to get their act together." Ms. Higgins isn't sure whether her new grant will be retroactive to Oct. 1. If it isn't, "we're going to be in a financial bind," she said.

In anticipation of a long shutdown, the National Head Start Association is beginning to compile lists of centers whose annual grants are set to expire Nov. 1.

On another front, federal impact aid—which helps districts make up for tax revenue lost because of the presence, for example, of an American Indian reservation or a military base or other federal installation—is in a precarious position.

Stopgap Solutions

Most federal education programs are largely "forward funded," meaning that districts start the school year with the bulk of their money already in hand; impact aid receives payments on a different schedule, making it more vulnerable to the vagaries of Congress.

As the shutdown began, the roughly 1,200 impact-aid districts had yet to feel a sting from the shutdown, said John Forkenbrock, the executive director of the National Association of Federally Impacted Schools. Districts that receive shares of the more than $1 billion in impact aid usually don't get their money until late October, even in a typical, functional budget year, he said.

But if the shutdown goes on for a long time, or if Congress passes a series of short-term extension measures keeping the government open for just a week or two while lawmakers hammer out their differences, things could get messier for impact-aid districts. Some districts have already asked for an advance on their federal funding—but were turned down, for now, because of the shutdown.

They include the Midwest City-Del City district, near Oklahoma City. The district gets roughly $500,000 to $600,000 in impact aid annually. Superintendent Pam Deering doesn't yet expect to lay off staff members or cut programs because of the delay. But she is worried about depleting her funding reserves in a year when Oklahoma is facing fiscal issues of its own.

Education researchers have also felt an immediate impact from the shutdown, which postponed the release of the NAEP-TIMSS linking study, which uses states' 2011 scores on the National Assessment of Educational Progress, or NAEP, in math and science to project how they would have scored on the Trends in International Math and Science Study, or TIMSS.

Not the Last Crisis

The Institute of Education Sciences website and related sites also posted nothing but a message saying they were "down due to a lapse in appropriations."

But a temporary shutdown pales against what may happen if Congress fails to raise the debt ceiling.

Clare McCann, a policy analyst for the New America Foundation, warned that a downgrading of the U.S. credit score, which happened the last time the country nearly defaulted, could have implications for districts' own credit ratings.

And if a default shakes the overall economy, schools could feel a serious squeeze, she added. Districts were largely able to blunt the impacts of sequestration, in part because the brightening state and local fiscal forecasts meant policymakers were able to boost K-12 spending to make up for the federal cuts.

But another economic downturn would mean all bets were off, Ms. McCann said: "This would be another hit on of all the other [blows] we're current dealing to schools."

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